Black executives come together to launch fund to support Black-led companies
Prominent Black leaders in Canada have a plan to seize the cultural moment: They’re pushing companies to set targets for promoting more minorities into top roles.
The strategy borrows from the playbook that has helped boost prospects for women in Corporate Canada. For five years, companies on the Toronto Stock Exchange have been required to disclose the number of women in senior executive and director positions and outline their policies for finding more.
The regulation has had an effect: women occupied 27 per cent of board seats at large Canadian-listed companies last year, up from 21 per cent in 2015, and they are filling more vacancies on boards and in management. Companies with few women in leadership jobs have come under increasing pressure from shareholders to change that.
There’s no similar disclosure rule for race, though the absence of Black representation in senior positions is obvious in many sectors. At Canada’s six largest banks and two largest life insurers, for example, there are 43 women in board positions but only one director who is Black. None of the eight companies has a Black executive in the C-suite.“We need to put the same focus on goals and commitments for visible minorities as we have for women,” Jaqui Parchment, head of consulting firm Mercer Canada Ltd., said in an virtual editorial board with Bloomberg. “There are parallels that can be drawn.”
The most recent census found that Black people made up 3.5 per cent of the population in Canada, where the killing of George Floyd has led to street protests and stirred debate about whether the country is as inclusive as many of its citizens think it is. Parchment is among a group of business executives who want clear promises from companies to promote more Black employees into leadership roles.
One problem is that businesses and government agencies in Canada collect less data on race than in the U.S. and “we just haven’t admitted to ourselves that there is a problem,” said Parchment, who moved to Canada from Jamaica as a teenager.
“Many Canadian companies congratulate themselves for meeting their ‘underrepresented minorities’ quotas yet their employment and advancement of Blacks remains non-existent,” said Dennis Mitchell, chief executive officer of Starlight Capital Ltd., a Toronto-based investment manager.
“The collection of race-based data at the corporate and government level will put pressure on corporations to make strides here, just as they did with gender equality,” Mitchell said.
The economic upheaval of the COVID-19 pandemic and the public response to tensions in the U.S. and elsewhere are starting to erode Canadian authorities’ traditional reluctance to measure race. Statistics Canada said June 11 it will start gathering race data in its monthly labor force survey. The agency said it will also try to break down numbers by race for some previously-released jobs reports.
Black executives are starting other initiatives amid the convulsive race debate. Last month a group announced the launch of a new fund to invest in Black-controlled companies and organizations in Canada as a way to combat systemic racism. Backers include Mitchell, Colin Lynch, head of global real estate investments at TD Asset Management, and Hazel Claxton, a trustee at Ontario’s University Pension Plan.
More change could come through advocacy by investors, legislators and executives themselves. Two weeks after Floyd’s killing, Wes Hall, founder of shareholder-services firm Kingsdale Advisors, launched the Canadian Council of Business Leaders Against Anti-Black Systemic Racism.
The group will hold the BlackNorth Initiative virtual summit on July 20. CEOs of Canadian companies will be asked to sign on to a seven-point pledge to curb systemic racism. One part of the pledge commits companies to filling 3.5 per cent of their Canada-based executive and board roles with Black leaders by 2025.
“Through this initiative, we will hold these companies accountable for what they are saying, making sure that they are walking the talk,” Hall said.
For Starlight Capital’s Mitchell, change can’t come quickly enough. Being one of the few Black executives in Toronto’s financial district can be “exhausting,” he said.
“You’re constantly aware you’re representing, if you will, an entire community,” Mitchell said. “So every little thing takes that much more energy.”
Hall is determined not to let the current debate about racial equality pass without action. He said he’s confident politicians will eventually act, mandating companies to ensure they have a minimum representation of racial minorities in executive and board positions.
“This is not a blip in the radar screen. This is a movement,” Hall said. “We are not going back.”